CBS agrees to air `issue ad' depicting deficit trial. The network sharpens its policy on `controversial' advertising

CBS, Inc. has revised its basic policy on airing commercials that deal with controversial issues. In its first act since rewriting its policy, CBS has decided it could accept, with a slight modification, an ad it previously rejected as too controversial -- a W.R. Grace & Co. commercial depicting children in the year 2017 putting their parents on trial over mountainous federal budget deficits.

The network was hesitant at first. Under the so-called Fairness Doctrine, the broadcast media are required to give equal time to opposing viewpoints. To avoid having to give away valuable air time for rebuttals, and also to avoid being vehicles for only the wealthy to air their political views in costly spot ads, the broadcasters have generally refused to run commercials on hotly debated subjects.

Under its revised policy, CBS has narrowed its definition of what it defines as a controversial topic. And the network reasoned that hardly anyone could be opposed to the idea of reducing budget deficits.

Grace waged an aggressive campaign to get the commercial seen. It hired Joseph Califano Jr., a former secretary of Health, Education, and Welfare who is now a partner in a New York law firm, to present its case to the networks.

Only two weeks ago, the Association of Independent Television Stations said 150 of its 160 members would air the ad free of charge. Grace also has taken out full-page print ads supporting its position. Mobil Oil wrote an ``advertorial'' in support of Grace for newspaper op-ed pages.

A cartoonist with the Dayton Journal Herald made fun of the networks' refusal to run the ad, showing the three networks in a docket. The caption read, ``By refusing the Grace advertisement weren't you scared you'd be assisting the deficit to grow. . .?''

In a letter to Mr. Califano, Gene F. Jankowski, president of the CBS Broadcast Group, stated it could accept the ad if one line were modified. The line went: ``There was even talk of an amendment.'' CBS decided the statement represented implicit advocacy of the proposed balanced budget amendment, which is a controversial topic.

Antonio Navarro, a Grace senior vice president, said the company had no problem making the suggested change. ``It's small and not at all central. It's a throw-away line.'' Navarro said the company was hopeful CBS would open its airways to still more issue advertising. ``We feel they now have a well thought-out policy instead of before, where there was nothing concrete to go by,'' stated Navarro.

But Stuart Sucherman, a lawyer with Jack Hilton, Inc., a media consulting firm, said the CBS policy still leaves a lot of questions. ``We still have a `Talmudic' definition of what is a controversial issue. The policy is restrictive rather than expansive.''

In its revised policy, CBS has defined a controversial issue as one ``which has a significant impact on society or its institutions, and which is the subject of vigorous debate with substantial elements in the community in opposition to one another.'' If an advertisement explicitly takes a position, or implicitly presents arguments similiar to those taken by one side of a position, CBS will reject the commercials.

George Schweitzer, vice president for communications at CBS, said the network had asked Grace to make the modification six months ago. Although Grace has indicated it now will make the modification, it has not yet resubmitted the ad.

ABC said it had not made any changes in its policies. NBC could not be reached for comment.

The budget deficit problem has been of special concern to J. Peter Grace, the chairman of W.R. Grace. President Reagan appointed Mr. Grace to head up a commission of business leaders to find ways to pare the budget deficit. The resulting Grace Commission Report was considered controversial in suggesting ways the government could save billions of dollars.

Califano, who is with the law firm Dewey, Ballantine, Bushby, Palmer & Wood, has written to all three networks asking them to completely revise their policy. In letters to the chairmen of the networks, he wrote, ``. . .the three national networks have near monopoly power in determining the extent to which television contributes to a well-informed citizenry and to the free marketplace of ideas.'' ABC restricts issues on controversial subjects to the after-midnight period while CBS and NBC prohibit them altogether.

Califano has been unsuccessful so far in convincing the networks to completely open up the airwaves.